Consumer Groups On Both Sides Of Atlantic Oppose Google Antitrust Settlement

Tue, Nov 26, 2013 at 10:41 am

    Consumer Groups On Both Sides Of Atlantic Oppose Google Antitrust Settlement

    SANTA MONICA, CA – Consumer groups on both sides of the Atlantic are opposed to a proposed deal to settle the European Commission’s antitrust investigation of Google.

    Consumer Watchdog, a U.S.-based public interest group, filed comments late Monday night opposing a proposed settlement to the European Commission’s antitrust investigation of Google because the proposed deal “will not restore a competitive search marketplace that will serve the interests of consumers.”

    Meanwhile, Monique Goyens, director general of BEUC, the European consumers’ organization, had this comment about the settlement the Internet giant has proposed:

    “It seems the Commission can’t find what it is looking for with Google. Progress has been slow and piecemeal. This second round of proposals are actually not just inadequate to solve consumer detriment, but are in fact self-serving… Somewhat bizarrely they are trying to settle an antitrust investigation by suggesting a new revenue stream and continuing to marginalize concerns. We find this unacceptable. The Commission should not bend the knee just due to investigation fatigue and [because] their mandate ends in 2014.”

    Consumer Watchdog, the U.S.-based nonprofit, nonpartisan group included in its comments to the Commission a short study showing how the Internet giant is taking advantage of its monopoly position in search to charge merchants more for placement in Google Shopping, causing higher prices for consumers.

    “Google used classic monopolistic tactics to largely clear the field of competitors and then

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    changed its business model to maximize its profits by charging merchants for placement,” said John M. Simpson, Consumer Watchdog’s Privacy Project Director. “Merchants then charge consumers more for the product to cover their payment to Google.”

    Consumer Watchdog studied product results returned through Google Shopping on the Internet giant’s Universal Search and compared prices for the same item listed on three competing comparison shopping engines (CSEs), Shopzilla, Pricegrabber and Nextag. Checking prices for 14 items this month, Consumer Watchdog found Google listings as much as 67 percent higher. In eight of 14 cases

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    lower prices were available on a competing CSE, the study found.

    “Google is behaving exactly as is expected of a monopolist in the exploitive phase of market dominance,” said Simpson.

    Read the study here: http://www.consumerwatchdog.org/resources/googlereport112513.pdf

    “The problem is that the suggestions the settlement is built upon simply do not solve the underlying issue,” Consumer Watchdog told the European Commission. “Moreover, Google’s conduct has severely damaged competition, leaving consumers with less choice and facing higher prices.”

    A June 2010 Consumer Watchdog, study, Traffic Report: How Google Is Squeezing Out Competitors and Muscling Into New Markets, documents how Google began emphasizing its own services in search results

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    when it launched Universal Search.

    Read that study here: http://www.consumerwatchdog.org/resources/TrafficStudy-Google.pdf

    Consumer Watchdog concluded Monday’s comments to the Commission:

    “Google has developed a substantial conflict of interest. It no longer has an incentive to steer users to other sites, but rather to its own services. It is becoming even more effective at this and has a greater incentive to engage in manipulation now that it is merging data collected across all its services. The only way to deal with this conflict is to remove it. Consumer welfare is the ultimate test of any antitrust settlement. Google’s proposed Commitments fail to meet this standard. Approval of the Commitments would essentially legitimatize Google’s anti-competitive practices and give the company more tools to strengthen its dominance.”

    Comments on Google’s second proposed settlement, which was meant to counter criticisms of the deal that was “market tested” in May, were originally due Monday. However, at least one company was granted an extension until Dec. 6 to make comments apparently because it

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    is doing some consumer testing of the proposals.

    – 30 –

    Visit Consumer Watchdog’s website at: www.consumerwatchdog.org

    Visit BEUC’s website at: www.beuc.org

    This post was written by:

    John M. Simpson

    - who has written 414 posts on Inside Google.


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